While initial estimates showed a 0.7 per cent contraction in output in the second quarter, industrial figures released yesterday exceeded expectations -- suggesting that the dismal GDP measure could be revised upwards.
Industrial production sank by 2.5 per cent between May and June, with manufacturing falling by 2.9 per cent. The Office for National Statistics (ONS) had previously forecasted a sharper fall, of 3.5 per cent.
“The estimated impact on GDP arising from this [new] data is an upwards revision of approximately 0.07 percentage points,” the ONS said.
And the UK’s economic output bounced back in July, a leading Westminster think tank reported yesterday.
The National Institute of Economic and Social Research (NIESR) said that GDP declined by 0.2 per cent in the three months to July, as last month’s output offset the contraction recorded in June.
“NIESR estimate that GDP bounced back in July to level one per cent above quarter two,” former Bank of England rate-setter Andrew Sentance said. “Even without further growth in August and September, this implies a big quarter three rebound.”
The Queen’s Jubilee distorted output figures for quarter two, which in turn is likely to “flatter” the quarter three bounce, NIESR economist Simon Kirby told City A.M. “It’s difficult to get a clear picture right now. Once available, we’ll look at the two quarters combined,” Kirby said.